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Rally Hasn't Erased Losses for Bullish ETFs

TSC Ratings provides exclusive stock, ETF and mutual fund ratings and commentary based on award-winning, proprietary tools. Its "safety first" approach to investing aims to reduce risk while seeking solid outperformance on a total return basis.

This year's stock market rebound has renewed investor confidence, but exchange-traded funds that are bullish on equities have a long way to go to make up the past year's losses.

The
S&P 500 index has advanced 10% in the past month, erasing a third of its decline in the past year. Even with double-digit returns, leveraged ETFs that bet on rising stocks have recouped only a fraction of their losses since May 2008.

Among the 50 leverage funds that are bullish, 20 have hit the market in the past year. The remaining 30 have lost 63%, on average, during that time.

Bullishly Leveraged ETFs Long Way From Recouping 1 Year Losses

Fund (Ticker) Rating

Total Return 1 Month

Total Return 1 Year

ProShares Ultra Real Estate (URE) E+

19.81%

-89.26%

ProShares Ultra Financials (UYG) D-

26.54%

-88.61%

ProShares Ultra Basic Materials (UYM) E

27.22%

-80.51%

PowerShares DB Commodity Double Long ETN (DYY) U

-2.57%

-75.46%

ProShares Ultra Oil & Gas (DIG) D

7.52%

-75.05%

ProShares Ultra Industrials (UXI) D

28.57%

-70.80%

ProShares Ultra Russell1000 Value (UVG) E

16.94%

-70.78%

ProShares Ultra Russell MidCap Value (UVU) E

23.96%

-69.07%

ProShares Ultra Russell MidCap Growth (UKW) D

22.00%

-66.74%

ProShares Ultra S&P500 (SSO) D

14.60%

-65.71%

Source: TheStreet.com Ratings & Bloomberg 5/5/2009

For the month that ended May 5, the
ProShares Ultra Financials Fund(UYG) returned 27% with its 200% leveraged bet on rebounds in
Bank of America(BAC - Get Report) and
Citigroup(C - Get Report). However, the fund is still down 89% over the past year.